The present description relates generally to the field of methods of and systems for purchasing retail products and/or services, and more specifically to methods of and systems for allocating a purchasing contract, such as an OTB-relevant purchasing contract, for retail products and/or services over a plurality of budgeting periods during the term of the contract.
Purchasing retail products and services from a supplier or provider typically involves sending a purchase order to the supplier requesting a specific number of items for a specific price. The number of items multiplied by the price of the items provides a total cost associated with the purchase order. Prior to sending the purchase order, the purchase order may need to be approved by an entity, such as a budgeting department. The entity may apply one or more rules, or checks, to the purchase order in determining whether to approve the purchase order. For example, a rule may dictate that the approval is granted or denied based on whether incurring the total cost of the purchase order is acceptable in view of budget constraints. Accordingly, the purchase order is approved or rejected based on budget constraints prior to being sent to the supplier.
The rules that are applied to the electronic purchase order may be any of a plurality of types of rules. For example, the rule may be a budgeting rule. Budget rules describe the amount of money available to purchase merchandise for a given time period. During a pre-season planning and buying phase, the budget rules may be used by planners and buyers to control their purchasing budget. During a seasonal phase, the budget rules may be utilized in calculating performance as the budget rules are updated based on sales activity. For example, planners and buyers may monitor the updated budget rules to determine if each category's performance is proceeding according to plan or if corrective steps, such as price reductions or stop orders, need to be taken to manage inventory.
The business of providing retail products and services can require that certain purchase orders be processed in a very short amount of time, while other purchase orders must be placed well in advance of the desired delivery. For example, changes in current trends in the fashion industry may require that inventory be increased on short notice. Additionally, fashion articles may require ordering well in advance of delivery, in some cases six months or more in advance. For certain aspects of the fashion industry, items may be required to be ordered one or more seasons in advance. Further, tracking inventory and budgets for seasonal items can be important to the profitability of business. For example, identifying a particularly fast selling item and ordering additional quantities of the fast selling item within a prescribed budget may increase the profitability of a retail location.
As part of the procurement process, providers of retail sales articles and services often enter into long-term purchasing agreements such as purchasing contracts in order to secure a supply of materials or provision of services over a certain period based on predefined conditions. For example, a provider may negotiate a central contract for an entire group of stores in order to obtain more favorable pricing conditions. Purchase orders for required quantities of retail sales articles or services may then be released against the contract throughout its duration. Accordingly, optimization of the smooth flow of the procurement process includes efficiently incorporating data from purchasing contracts.
As the term of a purchasing contract usually extends over more than one delivery or purchasing period used for budgeting purposes, the quantities or other amounts in the contract need to be distributed over each budgeting period such that purchase orders for required quantities of retail products or services may then be released against the purchasing contract throughout its duration for each distribution. In turn, a budget rule may need to be applied to the purchasing contract to determine whether sufficient funding is available or was reserved in the corresponding budget for the retail products or services.
Thus, there is need for a method of and system for allocating a purchasing contract, such as an OTB purchasing contract, which is configured for automated distribution of quantities or other amounts in the purchasing contract over several budgeting periods. There is further need for such a method and system configured for automated application of a budget rule to each distribution to determine whether sufficient funding is available or was reserved in the corresponding budget for the retail products or services.